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Parliament approves sale of strategic firms

After weeks of tense negotiation, a compromise bill on Large Scale Privatisation was passed by a parliamentary vote on September 16. The law permits the sale of majority stakes in selected state-owned banks and firms, but reserves a majority share for the state in the country's major energy utilities.
Of 115 deputies present in the chamber, 70 voted in favour of the law with 37 against and 8 abstaining.
According to the terms of a compromise reached between the former communist SDĽ and the other three ruling coalition partners, the new law requires that the state keep a minimum 51% share in gas utility SPP, pipeline company Transpetrol, energy producer SE and Slovakia's three regional electricity distributors.

After weeks of tense negotiation, a compromise bill on Large Scale Privatisation was passed by a parliamentary vote on September 16. The law permits the sale of majority stakes in selected state-owned banks and firms, but reserves a majority share for the state in the country's major energy utilities.

Of 115 deputies present in the chamber, 70 voted in favour of the law with 37 against and 8 abstaining.

According to the terms of a compromise reached between the former communist SDĽ and the other three ruling coalition partners, the new law requires that the state keep a minimum 51% share in gas utility SPP, pipeline company Transpetrol, energy producer SE and Slovakia's three regional electricity distributors.

In addition, the law prevents the sale of any stake in the Slovak postal service and railway network, as well as subterranean and surface water supplies and forest properties.

What can be sold, however, are majority stakes in state bank SLSP, insurer Slovenská Poisťovňa and telecom monopoly Slovenské Telekomunikácie (ST). According to the latest information available at press time, the size of the stake to remain in state hands in these firms had not been fixed, but was expected to be sobject to government agreement.

According to the articles of most Slovak companies, a 34% share is the minimum necessary to keep control over important strategic decisions taken by company managements.

The new law cancels a 1995 Law on Strategic Companies, which had prevented the sale of state-owned utilities, banks and monopolies considered of strategic importance to the economy. "It's very important to abolish this kind of law, because it brings an element of illogic and non-systematic treatment to the complicated process of privatisation," said Privatisation Minister Mária Machová at a press conference on September 14.

Parliament will also be given a greater role in deciding which privatisation projects are approved under the new law. Members of parliament have 30 days in which to make recommendations to government on planned sales, although their recommendations are not binding.

The law returns the final decision on the sale of stakes in state companies to the government. A 1995 law had removed this power from the cabinet and given it to the FNM state privatisation agency, a move the Constitutional Court ruled was illegal. "This returns privatisation decisions to a body [cabinet] which is resonsible to voters," said László Gyurovszky, a deputy with the Hungarian SMK coalition party.

The political opposition, which last fall attempted to have a referendum called to block the privatisation of Slovak 'strategic companies,' was roundly critical of the new law. "What will follow from the approval of this law on Large Scale Privatisation is the sale of Slovakia's crown jewels to foreigners," said Marián Andel, vice chairman of the extreme nationalist SNS party.

"No, no, no, no, yes" was how opposition HZDS party deputy Sergej Kozlík characterised the SDĽ's position on large-scale privatisation. Kozlík, a former Finance Minister in the 1994-1998 Mečiar government, said that after promising in last year's election campaign it would not privatise strategic companies, the government, and the SDĽ in particular, had betrayed citizens by approving the sale of the country's most important firms.

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